1. food and drink
2. food
3. salads

Trends in the Marketing of
Fresh Produce and Fresh-Cut/
Value-added Produce
DR. ROBERTA COOK
Dept. of Ag and Resource Economics
Cooperative Extension Specialist
University of California Davis
April 2015
[email protected]
Agenda
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Aftermath of great recession
Overview of fresh-cut produce market
Lettuce, leafy greens and bag salads
Value-added fruit
Fresh-cut (value-added) vegetables
Branded vs private label
Consumer trends
Conclusions
U.S. Fresh Fruit and Vegetable1 Value Chain,
Estimated Dollar Sales, Billions, 2010
institutional wholesalers
$12.3
$51.157
food service
establishments
produce and generalline wholesalers
imports
$69.175
farms
shippers
$26.82
1
$6.1
exports
Excludes nuts and pulses
Retailer
distribution
centers
supermarkets and
other retail outlets
$122.132
consumers
farm & public
markets
$1.800
Sources: Compilations by Kristen Park, Roberta Cook, and Edward McLaughlin based on U.S. Retail Census, ERS/USDA, NASS/USDA, U.S.
Department of Commerce, and other data.
Top 5 US Fresh Market Vegetable States* in 2014:
Geographic concentration of production (due to climate) limits
local sourcing potential, yet it is growing in the summer/fall
Area Harvested
% of
State
Total
Production
% of
State
Total
Value
State
% of
Total
CA
47
CA
52
CA
60
FL
10
AZ
8
FL
10
AZ
7
FL
7
AZ
6
GA
6
WA
4
GA
4
NY
4
GA
4
NY
3
Other
28
Other
25
Other
18
*Excludes potatoes
Source: Vegetables 2014 Summary, USDA/NASS, January 2015
Annual Revenue Growth of Leading U.S. Food Retailers, 2009-­‐2012 17 16
2009-­‐2012 Dollar Revenue – Compound Annual Growth Rate 12
9 8
PREMIUM/FRESH-­‐
FOCUSED: Includes natural channel, specialty 12 11
6 6
4 4 4
10 9
8 8 7
2 1
MID-­‐MARKET: Includes vast majority of supermarkets, grocery at supercenters, club stores 2
0
-6 -7
-8
-11
-13
VALUE-­‐FOCUSED: Includes dollar stores. limited assortment grocery Source: U.S. Sales data, 26 food retailers, Stores.org “Annual Top 100 Retailers” plus 2 add’l upmarket retailers, 2013 8-­‐K and 10-­‐K reports, CalculaNons and analysis The Hartman Group USA Select Supermarket* Fresh Produce Dept. Performance
During the Economic Downturn/Recovery, % Change v. Prior Yr
*As of 2013, includes Walmart Supercenters, Sam’s Club and Target.
2008
$Sales
2010
2009
Quantity
3.3
2.0
3.2
2011
4.3
2013
4.8
3.2
1.5
0.2
-3.6
-2.5
2014
0.5
-1.1
Sources: Various sources of scanner data. 2014 is fruit and veg sales only, excludes non fruit/veg sales in produce dept like salad
dressings, croutons, nuts, etc.
Note: Not same store sales and the store universes change over time so exercise caution when making annual comparisons.
The economic downturn accelerates pace of
change in the food marketing system
•  More than originating new trends, it intensified
pre-existing forces, such as channel blurring.
•  Margin pressure at all levels of the food system!
•  Many produce suppliers facing lower profits.
•  Growing food safety, traceability and
sustainability expectations all increase costs.
•  Need for major investments in info tech systems.
•  Foodservice took a huge hit, hurting fresh-cut.
•  Mergers are up (retailers, foodservice, shippers).
US Grocery Market Shares, by Key Channel,
1998 vs. 2013
Nontraditional
2%
1998
90%
8%
39%
mass – club - drug
supercenter - dollar
Traditional
conv supermarket,
fresh format, ltd
assortment, super
warehouse, other
Convenience
with and without
gas
Source: Willard Bishop, Competitive Edge, August 2014
46%
15%
2013
Forecast of Compound Annual Sales Growth Rate vs. Inflation
2013-2018
Fresh Format
e-Commerce
Ltd Assortm.
Dollar
Wholesale Club
Super Whse
Supercenter
Conv. w/gas
Other Sm Groc
Drug
Conv. wo/gas
Military
Tradl Supermarket
Mass
-6.0%
9.5%
12.1%
5.9%
4.1%
3.5%
3.0%
3.0%
2.1%
Food Inflation Compound
Annual Rate: 3.0%
2.1%
2.0%
1.9%
1.7%
Source: The Future
0.4%
of Food Retailing,
Willard Bishop,
June 2014
Fresh-cut, Organic and Total Fresh Fruit and Vegetable
Sales in Key US Food Retailers, % Change 2014 vs
2013
Weekly $ sales/store
Weekly quantity sold/store
Organic
Fruit
Organic
Veg
Freshcut
Fresh Cut 17.3 17.2 17.2
Fruit**
Veg
12.0
12.5
Salads 10.9 10.7
All
9.7
FruitVeg*
7.8
5.0
3.2
0.5
*Excludes other produce (such as salad dressings, toppings, etc.), which is 10% of produce dept sales dollars and 5% of quantity.
** Excludes overwrap.
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen, March 2015. Fresh Coverage Area (FCA) incl key retailers from food,
mass/supercenter and club chains, or more than 18,000 stores. It includes UPC, random weight and retailer assigned codes.
Consumer Behavior
•  Higher income and socially conscious foodies are
driving demand; their preferences lean to organic,
convenience (fresh-cut), flavor, local.
•  For mainstream consumers, positive attitudes about
wellness benefits of fresh produce not translating
into higher purchases. Improved flavor might help.
•  Perception that produce costs more and may be
wasted. Better shelf-life might help.
•  47.6 million people on food stamps (SNAP) in
FY2012-13 (vs 17.3 in 2000) for cost of $79.8M.
Distribution of US Households by Income Level, Share of Total
Fresh Produce Expenditures/Income Level & Ave. Fresh Produce
Expenditures/Income Level, 2012
$254 8%
$819 31%
$100,000+
19%
$594 18%
$70,000$99,999
14%
$478 14%
<$15,000
15%
Share of
Households
$50,000$69,999
14%
Source: Calculations by
Roberta Cook from the Food
Institute’s Demographics of
Consumer Food Spending,
2014.
$ = Average fresh
produce expenditures
per income group
$15,000$29,999
18%
$339 13%
$30,000$49,999
20%
$409 17%
% = Percent of
total fresh
produce
expenditures
contributed by
each income
group
Organic Fruit and Vegetable Sales and Pricing in
Key US Food Retailers, 2014 vs. 2013
Weekly $
Sales per
Store
Percent
Change
vs. 2013
Weekly
Vol. per
Store
Veg
$2,110
17.2
757
17.2 $2.79
0
Fruit
$1,103
17.3
532
12.5 $2.07
4.2
Organic
Product
Percent
Change
vs. 2013
Avg
Retail
Price
Percent
Change
vs. 2013
30% of households purchase organic fruits in supermarkets on 2 trips/yr.
51% of households purchase organic veggies in supermarkets on 4 trips/yr.
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
Fresh Department Average Sales: Percent Change
2014 vs. 2013
Weekly $ sales/store vs. 2013
Dollar increase
Weekly quantity sold/store vs. 2013
in household
3.1%
spending since
last year in
fresh
Average
household
spending
was flat
(-0.2%) in
center store
(nonfresh
departments)
compared with
last year
Meat
5
6
3
4
1
1
-2
Produce
Deli
1
Seafood
3
Bakery
-5
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association
and Nielsen, March 2015.
Emerging marketing channels for fresh produce
•  Convenience store potential, drug stores, dollar
stores.
•  E-commerce. Click ‘n collect, delivery, in-store
pickup, various models emerging, Amazon Fresh.
•  Major initiative to increase fresh produce on
foodservice menus despite the barriers.
•  Growing international trade provides more redundancy
in supply which may help large foodservice users to
add produce items to the menu.
•  $27B fast casual segment (about 12% of limited
service sales) very focused on fresh and creative
ingredients; great potential for freshcut.
Value-added/Fresh-cut Produce
Trends
Overview
Perishables Group Nielsen data
•  “Expanded all outlet” national sample includes
sales through about 62% of supermarkets,
plus sales through some nontraditional
retailers, such as, Walmart, Sam’s, BJs,
dollar stores; excludes Costco, limited
assortment and other minor formats. I refer
to as “Key Retailer” sales in my slides.
•  Another common Nielsen data set is referred
to as “total food” and excludes the
nontraditional outlets noted above. I refer to
as “Select Retailer” sales in my slides.
Percent of US Households Buying Fruit by
Category, 2014
84%
Bananas
79%
Apples
77%
Citrus
73%
Berries
61%
Grapes
Value-add fruit
Melons
Stone Fruits
Avocados
55%
52%
49%
47%
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association
and Nielsen, March 2015.
Percent of US Households Buying Vegetables by
Category, 2014
Potato
Bag Salad
Onion
Tomato
Carrot
Lettuce
Cooking Veg
Peppers
Cucumber
Value-add veg
87%
83%
83%
81%
78%
75%
68%
61%
56%
56%
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
Fresh-­‐cut Fruit and Veg Segments, Performance in Key US Retailers, 2013: Convenience Offers Value Copyright ©2012 The Nielsen Company. Confiden:al and proprietary. ITEM PENETRATION: SPEND PER TRIP: DOLLAR SALES: VALUE-­‐ADDED FRUITS +1% +2% +12% VALUE-­‐ADDED VEGETABLES +2% +4% +14% Sources: Nielsen Perishables Group FreshFacts® Total U.S. Fresh Coverage Area (FCA, and Nielsen Perishables Group FreshFacts® Powered by Spire, a Datalogix Company, both 52 Weeks Ending 12/28/13; PMA 2013 trade show; brand websites.
Copyright ©2013 The Nielsen Company. Confiden:al and proprietary. POWER SHOPPERS ARE PROFITABLE TO THE STORE: Key fresh categories bring the most powerful shoppers to the store, 2013 Milk
Cereal CATEGORIES MOST RFeady-­‐to-­‐eat REQUENTLY PURCHASED BY POWER SHOPPERS Carbonated SoY Drinks
Salty Snacks
POWER SHOPPERS MOST PROFITABLE SHOPPERS POWER SHOPPERS = TOP 33% OF SHOPPERS WHO OVER-­‐INDEX IN SPEND and FREQUENCY DRIVE 59% OF STORE DOLLARS/YR Canned Vegetables Packaged Bread
Bananas
Cheese
Confec:ons
Eggs Crackers Shelf Stable Juices & Drinks Tomatoes Cream & Creamers Refrigerated Juices & Drinks Deli Bulk Meat Yogurt
Cookies
Packaged Salad Potatoes Indicates Produce Categories Source: Nielsen Perishables Group FreshFacts® Powered by Spire, a Datalogix Company, data ending 2013 Shares of Total Value-added Produce Dollar
Sales, by Subcategory, in Key US Retailers,
2014
Value-add
fruit
Bag salads
29%
49%
Value-add
veg
22%
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015. Fresh Coverage Area (FCA) incl key retailers from food, mass/supercenter and club chains, or more than
18,000 stores. It includes UPC, random weight and retailer assigned codes.
Value-added Fruit Definitions
1. Overwrap
Typically sold in a tray with plastic overwrapping.
Contains words like quartered, halved, sliced,
wedge, eighth, and wrapped.
2. Fresh-cut Fruit
Cut fresh, no preservatives. Contain high level of
value-added characteristics such as chunk, cubed,
cored, cup, cut, wedge, spear, sliced, boat.
3. Jars and Cups
Perishable fruit in juice or preservatives, typically
sold in a plastic cup or jar. Contains words like
syrup, with or in juice, refrigerated, and chilled.
Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation, 2014. Fresh Coverage Area (FCA)
incl some nontraditional retailers such as Walmart, BJ’s; and UPC, random weight and retailer assigned codes.
US Value-added Fruit (VAF) Sales by Subcategory:
Share of Total VAF Dollar Sales in Key Retailers
(includes nontraditional retailers), 2013
Fresh-cut
Fruit,
81.2%
Overwrap,
10.9%
Jars/
cups,
7.9%
Source: FreshFacts® on Retail, Trends 2013, Perishables Group and United Fresh Foundation, 2014. Fresh Coverage Area (FCA)
incl some nontraditional retailers such as Walmart, BJ’s; and UPC, random weight and retailer assigned codes.
Valueadded Veg
Excludes
Bagged
Salads but
Includes:
Source: FreshFacts® on
Retail, Trends 2013,
Perishables Group and
United Fresh
Foundation, 2014.
Fresh Coverage Area
(FCA) incl some
nontraditional retailers
such as Walmart, BJ’s;
and UPC, random
weight and retailer
assigned bar code.
1. Side Dish
Includes fresh vegetables such as broccoli and cauliflower
typically served as side dishes. Can often be cooked in the
microwave directly in the bag.
2. Trays
Comprised of vegetable-only trays with/without dip. Trays
may also have a protein component or a nontraditional side
(bean dip, hummus, breadsticks, etc.).
3. Snacking
Single-serving sized (5 oz or less) vegetable items typically
consumed as a snack or on the go. Often include dip.
Keywords include snack, dip, bundle, pack and multi-pack.
4. Meal Prep
Items ready to incorporate into recipe or meal. Includes
carrots, vegetable blends and medleys. Preparation varieties
include diced, sliced, chopped, shredded; also soup mix,
fajita mix, pico de gallo, kabob, stew mix, stuffing mix.
US Value-added Veg (VAV) Sales by Subcategory:
Share of Total VAV Dollar Sales in Key Retailers
(includes nontraditional retailers), 2013
Snacking,
Meal
11.0%
prep,
Trays, 15.0%
18.0%
Source: FreshFacts® on
Retail, Trends 2013,
Perishables Group and
United Fresh
Foundation, 2014.
Fresh Coverage Area
(FCA) incl some
nontraditional retailers
such as Walmart, BJ’s;
and UPC, random
weight and retailer
assigned bar code.
Side dish,
56.0%
Lettuce, Leafy Greens and Bag
Salads
USA Household Likeliness of Bag Salad Purchase, 2014
Household Income Percent
Household Age Percent
<$25,000
$25,000-$49,900
44
50
21-39
40-49
47
52
$50,000-$99,900
55
50-58
51
$100,000+
64
59+
63
On average, both bag salads and lettuce have a 53% purchase
likelihood.
Source: Fresh Trends 2014.
US Per Capita Utilization/Consumption of
Lettuce, by Type, 1985-2013P (includes fresh-cut and bulk,
foodservice and retail)
35
Leaf
25
20
15
10
5
0
Romaine
All-23.8
Head
Lettuce
3.6
7.7
12.5
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013P
Lbs. Per Capita
30
Source: USDA/ERS, Vegetables and Pulses Yearbook May 30, 2014 and unpublished ERS
data for leaf and romaine.
US Iceberg Lettuce Market, 1960-2014: Case of declining
demand; International trade not a factor; Production based in
coastal CA and shifts to CA/AZ desert in winter
Million pounds
8,000
7,000
6,000
5,000
Production
4,000
3,000
1,000
0
Exports
Imports
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014P
2,000
Total
Consumption/
Utilization
Sources: USDA/ERS, Vegetables and Pulses Yearbook Data March 2015 as of 1990, and USDA/ERS,
U.S. Lettuce Statistics, 2011 for prior years.
US Fresh Romaine & Leaf Lettuce Production,
Consumption and International Trade,1989-2014P
Million pounds
5,000
4,000
2,000
1,000
0
Production
Exports
Total Consumption/
Utilization
Imports
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 p
3,000
Source: USDA/ERS, Vegetables and Pulses Yearbook Data March 2015
US Per Capita Utilization/Consumption of Fresh Spinach,
1985-2014,P (all channels, foodservice and retail,
includes fresh-cut)
Pounds per capita
3
2
1
0
P=Preliminary
Source: USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, 2015, http://
www.ers.usda.gov/data-products/vegetables-and-pulses-data/yearbook-tables.aspx.
Long-term trend is that bulk to process and
wrapped shipments are up: Monterey County
Head Lettuce Shipments 1990 vs 2013
Million Cartons*
Percent Share
Product Form199020131990
Bulk to Process
6.9
2013
13.9
15%
31%
Wrapped
14.2
23.4 30%
Naked
26.1
7.4 55%
17%
TOTAL
47.2
44.7100%
100%
* 50 lb carton-equivalent units, may
not sum to 100 due to rounding
52%
Source: Monterey County Ag
Commissioner, 1991 and
2013 annual reports
Monterey County Leaf Lettuce Production, by
Type, 2013
Crop
Butter Leaf
Cartons,
Acreage thousands
Value, Carton
thousands Share %
1.5
8,567
810
995
Endive
403
429
4,346
0.6
Escarole
376
1,052
4,015
1.6
Green Leaf
7,813
8,149
75,541
12.1
Red Leaf
2,053
2,149
18,352
3.2
Romaine
38,793
39,608
381,425
58.6
Leaf, bulk
Total
N/A
65,008
15,226
67,608
167,400
659,646
22.5
Source: Monterey County Crop Report 2013, Ag Commissioner.
100.0%
Top 10 Vegetable Sales and Pricing in Key US Food
Retailers, 2014 vs. 2013
Product
Packaged Salad
Tomatoes
Potatoes
Cooking Vegs
Onions
Peppers
Lettuce
Carrots
Mushrooms
Cucumbers
Weekly $
Sales per
Store
Percent
Change
vs. 2013
Weekly
Vol. per
Store
$3,553
$2,590
$2,561
$1,806
$1,564
$1,412
$1,279
$906
$842
$744
7.8
1.8
1.9
3.5
0.1
4.5
-3.6
-0.8
1.6
4.3
1,301
1,165
3,712
1,097
1,578
640
714
536
345
750
Percent
Change
vs. 2013
5.0
-0.1
-2.8
3.4
-0.3
2.4
-1.0
-1.7
-0.6
2.1
Avg
Retail
Price
$2.73
$2.22
$0.69
$1.65
$0.99
$2.21
$1.79
$1.69
$2.44
$0.99
Percent
Change
vs. 2013
2.6
1.9
4.9
0.1
0.4
2.0
-2.6
1.0
2.2
2.2
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
Top Bag Salad Segments: $Sales and Annual Growth
Rates in Key US Food Retailers, (AOC*) 2014
$Millions
$2,500
7
$4.328 B total salad sales, all segments, up 7.7%
$2,000
Number above bar
represents % change
vs. prior yr.
$1,500
$1,000
$500
-3
38
-7
7
22
4
$-
Source: Nielsen 52 weeks ending July 12, 2014. *Expanded all outlets combined (AOC) includes some
nontraditional retailers such as Walmart, BJ’s and others.
US Salad Kit $ Market Shares by Key Type in Select US
Retailers, excluding nontraditional retailers, 2014
Spinach
4%
[CATEGORY
NAME]
[VALUE]
Unique/
Premium
5%
SW/Mexican
6%
Caesar Lite
8%
Source:
Perishables Group
Nielsen, 52 weeks
ending July 12,
2014. Excludes
nontraditional
retailers.
[CATEGOR
Y NAME]
[PERCENTA
GE]
Organic
1%
Caesar
42%
Chop
21%
US Bag Salad Market Shares in Select Retailers, by Key Firm (%
total $ sales), and Point Change in Market Share 2014 vs 2013
% Share
Share Pt. Change
Private label
29.7
0.2
Fresh Express
28.7
-0.8
Dole
19.7
-1.2
Earthbound Farm
6.7
0.7
Ready Pac
3.5
-0.2
Organic Girl
2.8
0.3
All Other
8.1
NA
Source: Nielsen 52 weeks ending July 12, 2014. Excludes nontraditional retailers, such as, Walmart and clubs.
Percent of US Households Buying Vegetables by
Category, 2014
Potato
Bag Salad
Onion
Tomato
Carrot
Lettuce
Cooking Veg
Peppers
Cucumber
Mushroom
87%
83%
83%
81%
78%
75%
68%
61%
56%
49%
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
US Organic Salad Sales in Key Retailers,
2014
•  Total organic salad sales about $1 billion,
23% of the $4.3 billion in salad sales.*
•  Organic $ salad sales grew by 16% and unit
sales by 15%.*
•  According to the Hartman Group’s Organic
and Natural 2014 report, 73% of consumers
purchase organic products, and more than a
third use them at least monthly (all food and
beverage).
*Source: Perishables Group Nielsen 52 weeks ending July 12, 2014
US Consumer Purchases of Organics: Frequency and Age DistribuNon, 2014 How oken have you used organic foods or beverages in the past three months? at least occasional usage* TOTAL USERS 73% daily usage 9% 86% MILLENNIALS (18-­‐35) 12% 72% GEN X (36-­‐49) 8% 63% BOOMERS (50+) *Includes occasional, monthly, weekly and daily Source: Organic & Natural 2014 report, The Hartman Group Source: Organic and Natural 2014 Report, The Hartman Group, Inc. 7% Shoppers seek several claims in tandem, revealing motivation
Whole grain
Low sodium
Low sugar
High fiber
No preservatives
No trans fats
No chemical additives
Low calorie
No/Low fat
No HFCS
Natural
Non-GMO
Low cholesterol
Heart healthy
Antioxidant-rich
Certified organic
Gluten-free
11
24
22
22
21
20
18
37
35
33
33
32
31
30
28
41
48
Percent of
Shoppers
Source: FMI U.S.
Grocery Shopper
Trends 2014.
Regularly = at
least “fairly often”
Good fiber
No neg. ingreds.
Minimal processing
Heart healthy
Positive nutrition
Value-added Fruit Trends
US Per Capita Total Fruit Disappearance/Consumption,
Including Melons, Pounds 1976-2013, (all channels,
foodservice and retail)
350
Source: Fruit and Tree Nuts Yearbook, ERS/USDA, October 31, 2014.
2013
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
Fresh
Noncitrus,
Incl Melon
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1981
1980
24
112
Fresh Citrus
Fresh includes fresh-cut and commodity.
1979
1978
0
73
1977
50
29
55
2012
Process
Citrus
150 102
100
(frozen,
dried and
canned)
2011
78
101
2010
Process
Noncitrus
1983
200
293
1982
250
1976
Pounds per capita
300 282
Top 10 Fruit Sales and Pricing in Key US Food
Retailers, 2014 vs. 2013
Product
Berries
Apples
Citrus
Grapes
Bananas
Melons
Avocados
Stone Fruits
Cherries
Specialty Fruits
Weekly $
Sales per
Store
Percent
Change
vs. 2013
Weekly
Vol. per
Store
Percent
Change
vs. 2013
$4,019
$3,070
$2,797
$2,774
$2,721
$1,216
$1,197
$987
$623
$528
4.7
-0.1
4.8
3.1
-1.2
3.7
11.8
2.4
-3.4
-2.7
1,342
1,953
2,212
1,228
4,762
2,187
1,071
515
198
491
3.0
2.0
-2.6
-3.6
-0.9
7.8
2.7
-9.7
9.1
-9.6
Avg
Retail
Price
Percent
Change
vs. 2013
$2.99
1.7
$1.57 -2.0
$1.26
7.6
$2.26
6.9
$0.57 -0.3
$0.56 -3.9
$1.12
8.9
$1.91 13.3
$3.15 -11.5
$1.08
7.7
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
Value-added Fruit Category Sales and Pricing in Key
US Food Retailers, 2014 vs 2013
% Change vs. 2013
Value-Added Fruit
Fresh-cut Fruit
Overwrap
Jars & Cups
Weekly $
Weekly Vol.
Average
Sales / Store
Retail Price
per Store
9.2
3.7
5.3
12.0
9.7
2.1
2.5
-2.6
5.2
-10.9
-13.4
2.9
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association
and Nielsen, March 2015.
Value-added Fruit Sales in Select US Food
Retailers, 2014, excludes overwrap
Item
Value-added Fruit
Fresh-cut fruit
Jars & Cups
$ Sales
% Change
545,506,764
-7%
431,862,519
-4%
113,644,243
-16%
Source: Nielsen, 52 weeks ending July 12, 2014. Excludes nontraditional retailers; UPC only.
US Select Retailer Fresh-cut Fruit (excl other VAF) Shares by
Key Item in Dollars and Quantity 2014, ($431.8 million total sales in
this national sample, excl nontraditional retail)
Item
MIXED FRUIT
APPLE
PINEAPPLE
WATERMELON
CANTALOUPE
MANGO
All OTHER
MIXED MELON
BERRIES
HONEYDEW
Dollar Share %
28.8
22.5
16.7
13.4
5.4
4.7
3.7
2.4
2.2
0.6
Unit Share %
16.2
34.1
18.3
12.2
5.6
3.6
6.0
2.2
2.1
0.6
Growth in Unit
Sales %
-22%
6%
16%
-2%
5%
2%
151%
-10%
17%
-37%
Source: Nielsen, 52 weeks ending July 12, 2014. Excludes nontraditional retailers; UPC only.
Fresh-cut Fruit Shares, by Top 5 Package
Sizes, in Select US Food Retailers, 2014
Small sizes growing
and large pack sizes
declining.
0-8 oz
8%
Source: Nielsen, 52
weeks ending July
12, 2014. Excludes
nontraditional
retailers; UPC only.
8.1-13 oz
19%
35+ oz
12%
24-34.9
oz
12%
13.1-23.
9 oz
36%
Fresh-cut Vegetable
Trends
U.S. Per Capita Vegetable Utilization/Consumption,
Excluding Melons, 1976-2014P, (all channels, foodservice
and retail, includes freshcut), pounds
Pounds per capita
450
400
350
300
379
343
Processed includes frozen, dried and canned.
250
200
Processed includes frozen, dried and canned.
150
Fresh includes fresh-cut and bulk.
100
50
119
77
34
148
Processed Veg,
Excl. Potatoes
Processed
Potatoes
Fresh Potatoes
Fresh includes fresh-cut and bulk.
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014P
0
Fresh Veg, Excl
Melon and Potato
Sources: USDA/ERS, Vegetables and Melons Situation and Outlook Yearbook, May 30, 2014 through 2007; and for 2008-2014
USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, 2015. Figures compiled by Dr. Roberta Cook, UC
Davis, fresh and processed sweet potato share of total sweet potatoes is estimated; processed vegetables includes lentils and dry
peas, and excludes dry beans.
US Per Capita Consumption of Select Fresh
Vegetables, 1985-2014P (includes fresh-cut and bulk, all
marketing channels - foodservice and retail)
15
Pounds per capita
P=Preliminary
10
5
0
Carrots
Bell pepper
Broccoli
Sweet corn
Source: USDA/ERS, Vegetables and Pulses Yearbook March 2015.
Cucumber
Value-added Vegetable Category Sales and Pricing in
Key US Food Retailers, 2014 vs 2013
% Change vs. 2013
Value-Added Veg
Weekly $
Weekly Vol.
Average
Sales / Store
Retail Price
per Store
10.9
10.7
0.2
12.2
10.9
1.1
Trays
3.4
6.7
-3.0
Meal Prep
8.7
5.2
3.3
19.2
18.3
0.8
Side Dish
Snacking
Source: FreshFacts® on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen,
March 2015.
US Fresh-cut Veg Category Shares of Dollar Sales, by
Key Item, in Select US Supermarkets, 2012*
Item
Carrots
Mixed Veg
Green Beans
Greens
Broccoli
Snap/Snow Peas
Onions
Pico de Gallo
All Others
Total
Share (%)
47%
19%
7%
4%
4%
3%
3%
1%
12%
100%
Source: Nielsen *52 weeks
ending July 14, 2012
Promotional Measures in Action
for Value-added Vegetables
38.4%
30.6%
12.2%
Source: United Fresh Foundation, FreshFacts on Retail, Q1 2012.
61.6%
69.4%
18.9%
53.2%
26.3%
46.8%
Overall, relatively high
subsidy rates suggest
consumers don’t need a
discount to motivate
purchasing value-added
vegetables.
50.5%
Trays =
next highest volume sold on
promotion, 19%. 53% was
subsidized.
% Promo Efficiency
% Subsidized
49.5%
Side dishes = 26.3% of
volume sold on promotion.
Promotions were inefficient:
50.5% of the promotion
volume was subsidized.
% on Promotion
14.5%
Branded vs. Private Label
Private Label Sales in US Supermarkets, 2012:
Top Private Label Categories by Dollar Volume:
Fresh Produce Becoming Important
$9.5
Milk
$6.2
Bread & baked goods
Cheese
$6.0
Paper products
$5.9
$4.1
Fresh produce
$3.8
Medications & remedies
Deli prep'd foods
$2.6
Frozen meat & seafood
$2.4
Packaged meat
$2.3
Bottled water
$2.3
Billion
Source: Food Industry
Review, 2013 Edition.
The Food Institute.
US Bag Salad Market Shares in Select Retailers: Top
5 Firms and Private Label, Share of Dollar Sales
Private
label
share 2%
Other share
6%
9%
Private
label
share
Top 5 firms
91%
1994
30
%
Other share
61
%
Top 5
firms
2014
Sources: 1994 - IRI; Nielsen *52 weeks ending July 14, 2014. Excludes Walmart and clubs.
US Fresh-cut Vegetable Category Market Shares
and Sales Growth Rates, by Key Firm, in Select
Retailers, 2013 (Total Category Sales $1.4B)
Firm
Private label
Eat Smart
Greenline Foods
Grimmway Farms
Mann's Sunny Shores
Bolthouse Farms
Veg Glory
All other
Source: Nielsen 52 weeks ending July 13, 2013
Growth in $
Share % Sales %
39.9
5.9
4.9
2.9
2.6
2.5
2.3
39.0
5
1
6
1
1
19
21
7
Fresh-cut Fruit Top 5 Brand Shares, by Key
Firm, in Select US Food Retailers, 2014
PRIVATE
LABEL
34
Source: Perishables
Group Nielsen, 52
weeks ending July
12, 2014. Excludes
nontraditional
retailers.
OTHER
35
DEL
MONTE
9
CRUNCH
PAK
9
READY PAC
6
[CATEGORY
NAME]
[CATEGORY
[VALUE]
NAME]
[VALUE]
Importance of Produce Brands to US
Consumers, (both value-added and bulk produce)
Important
27%
Neutral
36%
Source:
Identifying
Consumer
Trends in the
Produce
Category,
PMA/Hartman,
2011.
Not
Important
37%
Factors Most Associated with Produce Brands,
comparing attitudes of consumers who say brand is important with those that don’t
Brand Is
Important
Brand Is Not
Important
Quality
Higher price
Better tasting
Value
Higher level of food safety
Less expensive
Community
45%
34%
50%
60%
26%
50%
25%
43%
20%
13%
9%
13%
4%
77%
Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, 2011.
Consumer Attitudes
How confident are you that the food
in your supermarket is safe?
89%
84%
66%
83%
Completely or mostly confident
'97
'99
'02
'04
'06
'08
Source: FMI US Grocery Shopper Trends, various years
'10
12
14
When shopping, the consumer looks for food and beverages that . . . 21
19
are minimally processed
contain only recognized
ingred's
are locally grown/
produced
have shortest ingred. list
Source: The Hartman Group Health and Wellness Reports, 2007-­‐2013 19
17
13
15
11
20
28
26
Percent of Shoppers
2013
25
25
2010
2007
Artudes/Opinions of Bagged/Packaged Salad Consumers, 2013 Percent of Salad Consumers Total US Households Percent Index I like to try out new food products
51
61
119
I enjoy ea=ng foreign foods
43
49
114
I like to try new drinks
32
37
117
I try to eat gourmet food whenever I can
I try to eat healthier foods these days
18
24
62
70
127
112
Source: Packaged Facts / Experian Marke:ng Services 2013. Health Artudes of Bagged/Packaged Salad Consumers, 2013 Percent of Salad Consumers Total US Households Percent Index I’ll try any new diet
13
18
142
Always think of calories in what I eat
28
35
126
Friends oJen ask my advice about health / nutri=on
19
24
126
I’m usually first to try a new health food
16
20
126
I consider my diet to be very healthy
40
46
117
Like to know as much as possible about ingredients
38
45
117
Source: Packaged Facts / Experian Marke:ng Services 2013. Five Growing Categories in Millennial Spending * Spending plan over the next 12 months Category Percent Percent Spending Spending More* Less* Fresh fruits and vegetables
37
8
Organic food
25
9
Natural products
23
10
Environ. friendly home cleaning items
20
10
Fresh meat
19
10
Source: Food Ins:tute Report, September 15, 2014 US Consumer Frequency of Purchases of Locally Grown Products, 2014 10%
11%
Occasionally
Always
79%
Source: FMI U.S. Grocery Shopper Trends 2014 Never
Reasons for Buying Locally Grown at Retail, 2014
86%
Freshness
75%
Support local economy
61%
Taste
56%
Like knowing source/how produced
Nutritional value
39%
Price
39%
Enviro impact of long distance transportation
31%
Appearance
30%
Long term personal health effects
24%
Source:
FMI
U.S.
Grocery
Shopper
Trends
2014
Conclusions
•  Fresh-cut produce sales are growing again despite the
economic downturn; VAF has been the most variable.
•  Ongoing margin squeeze means that firms at all levels of the
supply chain must improve management practices and share
data effectively; information technology will help.
•  Fresh-cut produce leads in category development but there
is still great potential for improvement with store level
assortment “right sizing,” pricing and promo, reducing shrink
and helping maintain margins.
•  Future growth rate of freshcut depends partly on success of
foodservice in adding healthy menu options.
Supplemental Information for Handout
Frequency of Purchasing Private Brand
Food Items at the Primary Store, 2011
Always
41%
Never
4%
Source:
U.S.
Grocery
Shopper
Trends
2011, FMI.
Occasionally
55%
Rating Private Brand Food Products at the
Primary Store, 2011
Excellent
36%
1%
Good
7%
56%
Fair
Poor
Source:
U.S.
Grocery
Shopper
Trends
2011,
FMI.
Initiatives to Increase Consumption
•  More forces are in play to educate consumers about
the benefits of fresh produce (MyPlate, salad bars
in schools, PBH, govt and private efforts to
increase awareness of fruit/veg health benefits.
•  Culinary Institute of America and Harvard School
of Public Health Dept of Nutrition Initiative: Menus
of Change, The Business of Healthy, Sustainable,
Delicious Food Choices. This is designed to
introduce more fresh produce on foodservice menus.
Schools Offer New Opportunities
for Produce and Targeted Product
Launchings on the Rise
Factors Considered in Consumer Decisions to
Purchase Packaged Produce
Clean / Sanitary
66%
53%
Price
Product convenience
26%
Nutritional information
25%
Packaging convenience
21%
Package product description
21%
Enviro-friendly packaging
18%
Package offers use / prep info
Kid-friendly messaging
25%
12%
26%
30%
31%
9% 7% 16%
35%
32%
17%
Extremely
Important
Somewhat
Important
13% 8%
28%
28%
21%
8%6%
24%
38%
21%
13% 3%
30%
34%
7%
8%5%
12% 9%
15% 11%
19%
51%
17%
Neutral
Somewhat
Unimportant
Not at all
Important
Source: Consumer Attitudes toward Packaged Fruits & Vegetables, PMA, 2011.
Factors that Discourage Consumers from
Purchasing Packaged Produce
64%
Higher price
46%
Prefer to select own
26%
Quality
Packages are too large
22%
Packaging is wasteful
21%
Desired items not available in pkg
20%
Size of the produce
18%
Packages are too small
8%
Other
5%
Most / all purchases are packaged
6%
Source: Consumer Attitudes toward Packaged Fruits & Vegetables, PMA, 2011.
Index of US Packaged Salad Sales ($) by Spectra Lifestyle/Behavior Stage,
All Channels
Very High 150+
High 120-149
LIFESTYLE
Cosmopolitan
Affluent
Suburban
Struggling
Modest
Working
Comfortable
Plain Rural
Centers
Spreads
Country
Urban Cores
Towns
Living
Total
% Total $
Start-up Families
HHs with young children only <6
83
104
82
45
47
50
73
6.3%
Small Scale Families
Small HHs with older children 6+
76
92
69
43
43
38
64
5.2%
Younger Bustling Families
54
Large HHs with children (6+), HOH <40
72
57
31
37
38
51
3.8%
Older Bustling Families
124
Larger HHs with children (6+), HOH 40+
213
161
61
74
84
144
16.3%
87
76
79
58
51
56
67
7.3%
118
95
105
44
44
51
78
9.5%
85
82
85
51
58
48
68
6.0%
Established Couples
2+ person HHs, no children, 35-54
177
210
198
96
113
100
163
18.6%
Empty Nest Couples
2+ person HHs, no children, 55-64
141
172
167
79
85
80
135
13.7%
Senior Couples
2+ person HHs, no children, 65+
117
154
158
65
90
89
121
13.2%
Total
111
141
126
56
64
65
100
16.5%
33.4%
23.2%
5.8%
12.4%
8.6%
Behavior / Stage
Young Transitionals
Any size HHs, no children, <35
Independent Singles
1 person HHs, no children, 35-64
Senior Singles
1 person HHs, no children, 65+
Percent Total $
Sources: Spectra BehaviorScape: Total Dollars / Spectra 07C/PG-Kids-Revision3 52wks (Total Dollars)
Understanding Value-added Fruit/Veg Produce Shoppers, excludes bag salads
•  Essence: a new tool from Nielsen Perishables Group’s FreshFacts® Shopper
Insights powered by Spire, that segments consumers into 16 shopper groups and
forty segments.
• 
Healthy Living Couples and Healthy Living Families are the most important shopper
groups for value-added produce, buying the largest share of value-added fruit
and veg.
• 
Healthy Living Couples are affluent, have no children in the home and tend to be
55-75+. They try to eat right but don't count calories.
• 
Healthy Living Families are affluent to lower income levels, have children in the
home and tend be 35 to 54. Like Healthy Living Couples, they try to eat well
without counting calories, and they rely on simple meal solutions and fresh
ingredients.
• 
Value-added produce lends well to both groups, as the highly affluent tend to do
in-home cooking using fresh ingredients, and middle income or less affluent
consumers tend to go to simple or quick meal solutions.
Source: FreshFacts® on Retail, Q2 2012, Perishables Group/United Fresh Foundation.
Understanding Value-added Fruit and Veg Produce Shoppers, excludes bagged
salads
•  Healthy Living Couples had the largest contribution to valueadded fruit (VAF), accounting for 26.9% of sales in the 52
weeks ending July 14, 2012.
•  The next largest group was Healthy Living Families,
contributing 17.3% to VAF sales.
•  On average, these two shopper groups purchase VAF 4.7 and
5.2 times/household/year, respectively.
•  Healthy Living Couples contributed 30.3% to value-added
vegetable (VAV) sales in the 52 weeks ending July 14, 2012.
•  Healthy Living Families contributed 16.3% to the VAV
category.
•  Healthy Living Couples average 4.3 purchase trips/household
per year for VAV, and Healthy Living Families 4.2 trips.
•  Natural/Organic households contributed 7.5% of VAV sales.
Source: FreshFacts® on Retail, Q2 2012, Perishables Group/United Fresh Foundation.